Measuring the level of contribution of crops to regional productivity in Iran

In this study, regional total factor productivity (TFP) was calculated for Khorasan, Fars, and Khuzestan provinces, and for the country. Level of the contribution crops to regional productivity was investigated. The regional TFP for crops in Khorasan, Fars, and Khuzestan provinces are found to significantly contribute to that of Iran as a whole. Wheat had the highest contribution to the growth of regional productivity. The decomposing regional TFP change into crops productivity, share of land area and crops mix indicates that crops productivity have had vital role in regional TFP growth. Moreover, the second factor (share of land area) was recognized as a determinant of increasing productivity in all regions. Share of land area resulted in a decreasing productivity only in Fars province. An amount of 1.48% of the productivity of Iran's and 6.85% of Khorasan can be explained by changes in crops mix. On contrary, this factor caused the productivity to decrease in Fars and Khuzestan provinces. In other words, crops mix switch from crops with lower TFP growth to those that are growing faster in Iran and Khorasan, but not in Fars and Khuzestan provinces.